Sainsbury’s (Strategy)

Strategy

Operating in an increasingly competitive environment amid constantly changing shopping habits, Sainsbury’s has had to make difficult decisions as margins come under pressure. 

However, its decision remain staunchly focused on its commitment to retail and in mid-2024, it revealed that most of Sainsbury’s Bank would be sold to Natwest as the grocer seeks to withdraw from a number of financial services to focus on its retail business. See Overview. 

Moving forward under the leadership of former retail and operations director Simon Roberts, who is now CEO, Sainsbury’s has refocused its strategy on the core food business, “putting food back at the heart of Sainsbury’s”, and is now building on those foundations under its “Next Level Sainsbury’s” strategy, see below for more. 

Indeed, Sainsbury’s corporate culture is guided by its ‘Good food for all of us’ brand campaign, which launched in late 2023, promising it wants to “provide good food for all customers, whatever their budget, tastes or dietary requirements, and however busy their daily lives”.   

Food First strategy

Roberts has been laser-focused on simplifying the business and reducing costs to invest in lower prices under his Food First strategy, leaning into the retailer’s core strengths. Strategic measures include:  

  • Increasing the rate of new convenience store and Neighbourhood Hub openings over the next three years: doubling the rate of c-store openings, adding 110 altogether by 2025. 
  • Closing meat, fish and deli counters, based on reduced customer demand.
  • Lowering food prices and offering consistently good value. 
  • Accelerating food innovation and tripling the number of new products launched annually and increasing their speed to market by at least 30%.
  • Profitably growing groceries online to meet further demand.  

Through its Food First strategy, Sainsbury’s achieved more than £900m of cost savings over the two years to March 2023 and by April 2024 had delivered £1.3bn of cost savings over three years. The business has been looking to reduce its retail operating costs and using these savings to create at least £600m of extra yearly funding by March 2024, which can be reinvested into the customer offer and achieving better financial returns.  

Since 2020 when the retailer recognised it was too expensive and losing market share it has reset its value position and worked to “significantly shift customer value perceptions”. Roberts said in April 2024, that having invested £780m in price over the last three years, it is at its “most competitive on price ever”, with a value proposition that includes Nectar Prices, Aldi Price Match, and Low Everyday Prices.

Moving ahead under “Next Level Sainsbury’s” strategy

Building on the momentum gained under its Food First strategy, in early 2024 Sainsbury’s revealed its three-year ‘Next Level’ strategy, through which it aims to gain grocery market share “by bringing more of Sainsbury’s food range to more customers, becoming the first choice for food for more people, continuing to attract more bigger basket primary shoppers”.

It will also expand on the strengths of the Nectar loyalty programme, as well as Argos, and will invest in its “capabilities across technology and infrastructure” and delivering “another £1 billion of structural cost reduction, underpinning these objectives and driving growth and efficiencies”.

As part of its ‘Next Level’ strategy, Sainsbury’s plans to deliver on the following eight commitments by March 2027:

  1. Food volume growth ahead of the market
  2. Customer satisfaction being higher in FY27 (FY2026) than FY24 (FY2023)
  3. Higher colleague engagement in FY27 (FY2026) compared to FY24 (FY2023)
  4. Deliver its Plan for Better commitments
  5. Deliver profit leverage from sales growth
  6. £1 billion of cost savings over the three years to FY27 (FY2026)
  7. £1.6 billion+ retail free cash flow over three years to FY27
  8. Higher return on capital employed

Roberts said: “Our Food First strategy has delivered on its promise over the last three years, making Sainsbury’s a stronger business with a much sharper position on value and a major refocus on our innovation. Customers have recognised the progress we’ve made, as our market share gains have shown.

“Our Next Level Sainsbury’s strategy is about giving customers more of what they come to Sainsbury’s for – outstanding value, unbeatable quality food and great service. Thanks to our scale, our brand and our people, we are in a unique position to deliver for customers across Sainsbury’s, Argos and Nectar.”

The ‘Next Level’ strategy gives Sainsbury’s an “updated purpose” focusing on these outcomes:

  • First choice for food
  • Loyalty everyone loves
  • More Argos, more often
  • Save and invest to win

Sainsbury's Edinburgh

As well as investing in supermarkets, Sainsbury’s has introduced new initiatives such as fresh fruit and vegetable Fresh Food Markets. Launched at Sainsbury’s Hempstead Valley store, Kent, in early 2021, the format features “a market-style presentation of fresh fruit and vegetables, new signage and a focus on seasonality and proud British heritage”, as well as a new bakery, hot pizza counter, self-serve patisserie counter, food-to-go hub, beauty department and floral range. 

Purchase of Homebase stores

Sainsbury’s purchased 10 Homebase leasehold branches in mid 2024, which represented a gross investment value (the total capitalised cost of leases, acquisition premium and fit-out costs) of around £130m. It went on to buy a leasehold of another Homebase later in the year. Once converted, the extra stores will add approximately 235,000 sq ft to Sainsbury’s supermarket trading space. The acquisition is anticipated to complete in early September 2024 with the first of the stores due to open in summer 2025, with all the locations set to be converted by the end of 2025.

The move builds on Sainsbury’s Next Level strategy, which includes expanding its reach to shoppers and providing a bigger range. Sainsbury’s plans to add more than 300,000 sq ft to its store footprint over the next few years as part of the Next Level strategy. 

The grocer said: “The addition of new locations means nearly 400,000 more people will be within a 10-minute drive of a Sainsbury’s supermarket. The new stores will showcase Sainsbury’s latest food offer with a refreshed, innovative look and feel and excellent sustainability credentials.”

In-store cafe closures and Restaurant Hub openings  

Over the three years from early 2022, Sainsbury’s is transforming its eat-in, takeaway and home delivered hot food and drink offer in 250 of its supermarkets. This includes the opening of more Restaurant Hubs and Starbucks in supermarkets, and also the closure of 200 Sainsbury’s cafes by spring 2022. It has also been shuttering less popular hot food counters. 

It successfully trialled its new food hall format, The Restaurant Hub, at the Selly Oak store in Birmingham. In partnership with Boparan Restaurant Group (BRG), Restaurant Hubs offer eat-in, takeaway and home-delivered hot food and drink from a range of brands - including Caffè Carluccio’s, Ed’s Diner, Slim Chickens and Gourmet Burger Kitchen.  

Meanwhile, Sainsbury’s opened its 60th in-store Starbucks café in early 2023 and mid-way through the year, plans were unveiled to open standalone Greggs cafés inside several of its stores before the end of the year. ‘Half a dozen’ new sites will be launched through the partnership, including ‘coffee-style operations’ in-store, and concessions at Sainsbury’s garages. The cafés will be operated by Greggs. 

Building on its partnerships, from early 2024, Sainsbury’s is teaming up with Costa Coffee to open 11 new cafes in Sainsbury’s stores during the year, with Costa making a £3m investment. Already working together, Sainsbury’s and Costa’s existing tie ups include the grocer featuring 1,000 Express machines across Sainsbury’s stores and petrol stations, and the retailer also carrying Costa’s Ready to Drink and At Home ranges. 

Sainsbury's_Greggs Petrol Station 1

Sainsbury’s other in-store initiatives have included Carluccio’s in-store counters, wellness hubs and pet hubs, while a ‘food on the go’ store format for freshly made food that can be eaten in or taken away has also been introduced.  

Argos integration 

The group has accelerated the final stages of integrating Argos stores into Sainsbury’s. 

The restructure of the Argos store estate includes: 

  • Up to 150 more Argos shop-in-shops being opened in Sainsbury’s stores by March 2024.
  • 150 to 200 more Argos collection points being introduced in convenience stores and supermarkets so that every Sainsbury’s supermarket has either an Argos collection point or shop-in-shop.  
  • Closure of around 420 standalone Argos stores, downsizing the Argos standalone store estate to around 100, by March 2024.  

By the end of FY2022, there were: 

  • Around 445 Argos shop-in-shops in Sainsbury’s supermarkets
  • Approximately 455 digital collection points where customers can pick up Argos, Tu Clothing and eBay orders, as well as DPD parcel deliveries  

Sainsbury’s transformation programme, which includes the changes being made to the Argos store estate, is intended to reduce its “cost to serve” by £105m. 

Investing in price and staff to remain competitive 

Sainsbury’s series of measures to help customers though the cost-of-living crisis have included: 

  • Plans, revealed in June 2023, to invest £15m into cutting the price of household staples, such as rice and pasta.
  • Over the two years to March 2023, it invested over £560m in keeping prices lower, which is £10m more than it had committed to earlier.  
  • Increased its Aldi Price Match to over 400 items, although this lags behind Tesco, which matches some 600 products to Aldi. 
  • Its Price Lock initiative fixes the price on a range of household essentials. 
  • My Nectar Prices provides customers with personalised offers. 
  • Made its Basics range a priority and in May 2023, rebranded its value range to Stamford Street, named after its previous home address in London Blackfriars. 

Sainsbury’s has also offered more competitive staff packages in recent years, bringing pay reviews forward and boosting shopfloor staff pay. It went on to invest £200m in January 2024 in increasing pay for Sainsbury’s and Argos staff, claiming it had become the “largest supermarket to pay the new Real Living Wage”.  

However, in early 2024 Sainsbury’s was consulting on 1,500 roles as it looked to “save and invest”. The proposals include simplifying Sainsbury’s store support centre structure, creating more efficient contact centre operations, consolidating the general merchandise fulfilment network and improving the bakery offer. Sainsbury’s said this will simplify operations and help deliver its Next Level Sainsbury’s strategy.

Nectar at the heart of its ecosystem  

The digitisation of the Nectar loyalty scheme has provided a platform for greater personalisation and the opportunity to monetise Nectar data. 

Customers receive unique offers via the app and earn points for everything from travel and food and drink to entertainment.  

Points can also be earned across all Argos channels. 

The Nectar Scheme was shaken up through the launch of Nectar Prices in April 2023, while in the same month, Sainsbury’s introduced its ‘Pocket Friendly Prices’ campaign across its convenience stores. In late 2023, personalised Nectar Prices were extended to the grocer’s website and app.   

Meanwhile, as well as giving its customers more personalised offers and rewards from brands, Nectar360 – which Sainsbury’s said in its FY2022 was on track with its plan to “deliver at least £90 million incremental profit by March 2026” – provides Nectar’s clients and partners with access to more data to help them engage customers in a targeted way.  

From October 2023, Sainsbury’s is expanding its network of connected digital screens (both inside and outside stores) to 800, vastly growing its media reach. 

Through the partnership between Nectar360 and Clear Channel, the screen upgrade will enable brands to tailor campaigns appearing on the screens to the weather, location, events and competitions.  

In early 2024 it was revealed that Nectar360, in partnership with CitrusAd, was set to launch Branded Shops, which allows brands to advertise on Sainsbury’s website via a ‘shop in a shop’ with a customised, fully-branded landing page, within Sainsbury’s website infrastructure. For an additional fee, brands will be able to make the shopability of their products better in relation to other Sainsbury’s-stocked brands and to get extra information about how shoppers interacted with their page. 

Sainsbury’s 11 million-plus Nectar digital users and over 18 million Nectar members gives it a wealth of data. The retailer has been looking to completely overhaul its legacy data through the creation of its custom ASPIRE analytics platform.  

Growing its convenience offer 

Sainsbury’s convenience store sales hit the £3bn mark for the first time in March 2023, with 12% more customers shopping in Sainsbury’s Local convenience stores than in the previous year. This reflected customers’ return to stores post pandemic and prioritisation of speed and convenience as they went back to the workplace.  

As part of its ‘Next Level’ strategy, Sainsbury’s expects to open around 75 new Sainsbury’s Local convenience stores over the next three years (from early 2024), while also allocating more space to “food on the move ranges”, which it said is the “primary mission of most customer visits”.

And in late 2024, Sainsbury’s became the first supermarket in the UK to price match Aldi across its estate of convenience stores, matching on 200 products at its Local c-stores.

Talking about action taken since the grocer decided to put food back at the centre of the business four years earlier, Roberts said: “In our Sainsbury’s Locals, we’ve worked hard to offer market-leading prices on essential items and popular breakfast, lunch and dinner staples. We have also refreshed our Local store layouts and rebalanced space, increasing the number of products in store by 7% and adding more food-on-the-move products – the primary mission of most convenience shoppers. When you’re shopping in Sainsbury’s Locals, you can be sure of excellent value, quality and choice.”

The exterior of the new-look 'micro' Sainsbury's Local store in Holborn.

The exterior of the new-look ‘micro’ Sainsbury’s Local store in Holborn.

Additionally, Sainsbury’s has been looking to ‘flex’ the format and size of stores to suit local needs. This included an ‘On the Go’ store in London’s Leicester Square. The retailer launched the first of these stores in London’s Mansion House in 2020 with the format destined for city-centre locations. 

The grocer has also been opening Neighbourhood Hub stores. These larger format convenience stores offer a wider range of locally tailored products and services across food, beauty, clothing, seasonal and general merchandise.   

Habitat as its main home brand 

Sainsbury’s made Habitat its main home and furniture brand within Sainsbury’s and Argos and, in early 2023, announced that it would close its three remaining physical Habitat showrooms and instead launched a new digital showroom. 

Improvements online 

Online capacity was rapidly expanded during the pandemic, allowing Sainsbury’s to fulfil 850,000 orders a week, including home delivery and click and collect.  

Its acquisition of Argos gave the group an online boost, particularly through Argos’ fulfilment offer, including its Fast Track same-day delivery service. See Argos’ strategy. 

Integrating apace, the group now uses the same Sainsbury’s website infrastructure for Habitat and Argos to ensure consistent shopping experience for customers, while reducing costs.  

As it looks to grow grocery online, Sainsbury’s has rapid delivery partnerships with UberEats and Deliveroo, as well as its in-house delivery service Chop Chop whereby consumers can order up to 25 items for home delivery within 60 minutes.  

Partnership with Microsoft to “become the UK’s leading AI-enabled grocer”

Sainsbury’s announced a five-year strategic partnership with Microsoft in May 2024 to bolster its artificial intelligence (AI) and machine learning capabilities, helping drive its Next Level strategy.

By putting the “power of AI” into the hands of its store employees Sainsbury’s intends to create more engaging and efficient stores and online shopping experiences.

Staff will also be upskilled so that they can “learn and grow in the new AI-driven economy”.

The three core areas that Microsoft’s services will be used to transform are:

- Enhanced customer experiences: Generative AI will be used to create a more interactive online shopping experience and improve shoppers’ search experience, enhancing shopping by making it more efficient and engaging.

- Empowered store employees: Store staff will have access to real-time data and insights for key processes, such as smarter shelf replenishment processes.

Sainsbury’s said: “Using AI to pull together multiple data inputs, such as shelf edge cameras, colleagues will be guided to the shelves that need replenishing; saving valuable time as well as ensuring sales opportunities aren’t missed. Sainsbury’s store colleagues will have more time to focus on the things that matter to customers, with access to AI-guided support to address customer and colleague queries effectively in the moment, improving efficiency and enabling the delivery of leading service for Sainsbury’s customers.”

- Data powering the Sainsbury’s business, built on smart cloud foundations: Combining Sainsbury’s data assets with Microsoft 365 collaboration tools, generative AI and machine learning capabilities will allow Sainsbury’s to continue drive returns through its ’Save and invest to win’ programme: transforming operations, driving better decision making and running a more efficient business. The retailer said: “This will be delivered through Microsoft Azure as part of Sainsbury’s cloud ecosystem, reducing time to market for new services and innovations.”

Sainsbury’s chief retail and technology officer Clodagh Moriarty said: “Our collaboration with Microsoft will accelerate our ambition to become the UK’s leading AI-enabled grocer. It’s one of the key ways we’re investing in transforming our capabilities over the next three years, enabling us to take another big leap forward in efficiency and productivity, continue to provide leading customer service and deliver returns for our shareholders.”

AI-focus gaining momentum

Sainsbury’s announced a seven-year deal with its long-term digital commerce partner NCR Voyix in mid-2024, to transform customers’ shopping experience and support the grocer’s Next Level strategy through AI checkouts.

The retailer’s checkout technology will be upgraded via the roll out of the NCR Voyix Commerce Platform, Point of Sale Solutions and Next Generation Self-Checkout systems to 22,500 checkouts spanning its supermarkets, convenience stores and petrol stations.

Sainsbury’s said NCR Voyix’s cloud technology “will be able to help speed up the customer journey by receiving real-time data and analytics while harnessing the power of AI for sales analysis, estimating future store performance, colleague productivity and cash management”.

Staff will be able to approve transactions on tablets remotely.

The supermarket has made numerous changes to its checkouts in recent years, as part of its Food First and Next Level strategies, under a programme labelled its ‘Future Front-End strategy’. This has included stripping replacing manned checkouts with more self-checkouts in order to enhance efficiency.  

Technological investment 

Technology and digital innovations have been investment priorities in recent years as Sainsbury’s improves systems, efficiency and productivity. 

Its creation of teams responsible solely for innovation at its tech hubs and digital labs underlines Sainsbury’s commitment to a digital-led future. 

From late 2022, Sainsbury’s accelerated its cloud-first strategy, in partnership with Tata Consultancy Service, as it sought to make time-to-market faster and establish new revenue streams.  

The multi-year deal will consolidate and modernise the grocer’s IT infrastructure into a hybrid cloud stack via TCS Enterprise Cloud. Tata also supplied end-to-end managed services for network connectivity, workplace services and security.  

Speaking at the Amazon Web Services (AWS) Retail Symposium in May 2023, Sainsbury’s chief product and analytics officer Helen Hunter explained that the grocer’s technology team’s three guiding principles are: make it better, own it, and be human.  

Sainsbury’s five-year business transformation to the cloud has comprised:  

  • Cloud design by default 
  • Zero data centre strategy  
  • Single tech division across the business (Sains, Argos, Tu, Habitat)  
  • End-to-end product lifecycle management  

Hunter said that 60% of Sainsbury’s technology estate was in the cloud, with AWS operating as a major partner in hosting and supporting, meanwhile 50% of all business-critical systems are in the cloud. Using cloud-based systems has brought the retailer more stability and access to hundreds of value-added third-party data services, helping innovation.  

As part of its tech transformation, Sainsbury’s had reduced the number of data centres it operates from 12 to two as of end-2023. These centres will be partner operated, with the retailer no longer owning any of its own.  

In-store technologicial innovations have continued apace too and in early 2024, Sainsbury’s opened a flagship 53,000 sq ft store in Talbot Green in Wales, at the heart of which is a state-of-the-art food hall featuring digital signage and displays. The store also includes an ultra-rapid charging service for users of electric vehicles. 

Hybrid self-checkouts and product-locating touchscreens

From late 2024, Sainsbury’s is trialling hybrid self-checkouts, which require customers to scan their own shopping but also feature conveyor belts for them to place their items on, as well as areas for packing their shopping.

A similar size to standard manned conveyor belt checkouts, these new systems give customers more room to carry out self service for a full trolley and not just a basket of items.

In-aisle touchscreen devices are also being tested, allowing shoppers to locate specific items in the store without them having to ask shopfloor staff.

These measures feed into Sainsbury’s cost-saving and efficiency efforts, while it continues to upgrade stores.

Collaboration with SAP, Accenture and AWS

Software firm SAP was appointed in September 2024 to “revolutionise” Sainsbury’s commercial systems, helping it respond to changes and optimise technology costs.

Part of the process will see Sainsbury’s legacy systems be consolidated, allowing the retailer to achieve “business agility through cloud-based solutions, as well as a simplified and cost optimised technology estate”.

The grocer said: “The multi-year transformation programme will mean Sainsbury’s systems grow alongside the retailer’s Next Level Sainsbury’s plans.”

It will also improve the execution of price and promotions so that customers can have a more “tailored value experience”.

SAP is leading on the design of the new solution in collaboration with Sainsbury’s transformation partner Accenture and Sainsbury’s cloud provider Amazon Web Services (AWS).

Smarter stores enhance convenience and value 

In recent years, Sainsbury’s has created “smarter stores” and continues to digitise day-to-day processes. 

Its ‘scan and go’ SmartShop app allows customers to complete their in-store shopping journey entirely on a mobile. Shoppers can create shopping lists by scanning items, and scan products while they shop and pay for them at a designated self-serve checkout.  

Over the years, Sainsbury’s has trialled checkout free shopping and in 2019, removed all checkouts from its Holborn c-store, which features Amazon’s Just Walk Out technology, encouraging shoppers to download the SmartShop app to scan and pay for items.  

Innovating further, it introduced a new payment option in late 2022, using Checkout.com technology, to allow customers to scan products and pay using their phones bypassing tills entirely. 

The launch proved timely, not only modernising and simplifying the grocer’s payments infrastructure and making shopping more convenient for customers, but also helping them track spending and clinch savings through Your Nectar Prices’ (formerly My Nectar Prices) personalised discounts. 

SmartShop is now available in all Sainsbury’s supermarkets and SmartShop Mobile Pay is being rolled out to its convenience stores.  

In-store technology is also being used to help inform consumers’ buying decisions and has included Sainsbury’s partnership with L’Oréal, launched in December 2022, to offer AI-powered skincare consultations using its ModiFace technology. Shoppers across 100 Sainsbury’s stores can access personalised skincare consultations and product recommendations via iPads loaded with AI skincare tech. 

Bold product innovation 

Bold product innovation will help differentiate Sainsbury’s from the discounters and faltering rivals, such as Morrisons, while its acquisition of Argos had already broadened its product range. 

Argos has contributed an average of around 15% of Sainsbury’s total sales on an annual basis for the past five or so years. See the Argos profile.  

Sainsbury’s has been innovating its own-brand offer too, and launched 300 new products for Christmas 2022, including 145 Taste the Difference products.  

Third party tie-ups 

New third-party tie-ups will help Sainsbury’s continue to elevate its non-food proposition, broadening its product assortment while keeping overheads down. 

Building its fashion roster and bolstering the proprietary Tu clothing offer, Sainsbury’s is following Next and Marks & Spencer as an online fashion marketplace, expanding its online fashion partnerships with brands including Sosandar, Little Mistress and Finery.  

The fashion marketplace concept was being driven by Paula Nickolds who was Sainsbury’s general merchandise commercial director at the time and was being supported by Sainsbury’s director of clothing and home, and former John Lewis director, Christine Kasoulis. 

However, it was revealed in early 2024 that Nickolds was leaving Sainsbury’s to become chief executive at The White Company. Nickolds was replaced by chief transformation officer Graham Biggart,  who took on commercial responsibility for general merchandise and clothing across Sainsbury’s and Argos. Meanwhile, Matt Leeser took on an expanded role as general merchandise commercial director. See Argos profile.  

In September 2023, Sainsbury’s announced plans to open “branded fashion destination hubs” in at least 50 of its stores, alongside its Tu Clothing brand. It intends to “grow its branded proposition at pace” over the next five years as it seeks to provide more choice for consumers. 

It has previously partnered with other brands to make better use of excess space in out-of-town big-box stores, including Clarks and Fat Face.  

Meanwhile, the Tu clothing web platform has been migrated onto the Argos platform, allowing customers to use their Nectar points for purchases, further integrating the grocer’s portfolio of brands, as well as driving savings and simplicity.  

Supply chain improvements 

While Sainsbury’s strategy is to pick its online orders from the store network, in recent years it has undergone a programme of updating depots and supply chain systems for greater process synchronisation and automation and to enable real-time visibility of stock.  

It is also accelerating the integration of the Sainsbury’s, Argos and Habitat supply chain and logistics network to make the business simpler and more efficient. 

It merges online and in-store demand, which drives efficiencies across the end-to-end supply chain through a single operation and gives it a single view of its products.  

Sainsbury’s real time supply chain system enables deliveries to stores to be based on the most up-to-date stock information, improving availability for customers and reducing waste.  

Its supply chain transformation has been supported through the introduction of an AI-powered ‘self-learning’ platform from US technology company Blue Yonder from early 2020, helping the supermarket learn and respond to its customers’ behaviours. It provides AI-powered demand forecasting and replenishment, among other functions.  

Product availability has “improved significantly” through its investment in AI-driven demand forecasting technology. 

A radical supply chain shake up, as part of Sainsbury’s £220m investment back into its logistics network over the next three years, was announced in April 2023 and entails: 

  • 3,000 logistics roles in consultation, with employees transferred across to partner organisations.
  • Move to three dedicated logistics partnerships spanning food, transport, and general merchandise and clothing by the end of 2024, allowing the retailer to operate its supply chain “at a national level for the first time”. 
  • Wincanton handling Sainsbury’s transport operations, GXO managing fresh and frozen at several warehouses. 
  • DHL taking on extra warehouse operations for Tu Clothing, Argos and Habitat, as well as handling warehousing and transport for general merchandise home delivery.  

Simplifying how the partnerships work will help Sainsbury’s meet its 2025 carbon reduction targets. 

The non-food supply chain systems have been under scrutiny from 2015. In February 2023, Sainsbury’s announced the closure of two of its general merchandise depots as it invests £90m in automation to modernise its general merchandise logistics network. It described the investment as “one of its biggest to date in advanced automation and modernisation”.  

Five existing Sainsbury’s and Argos depots will be consolidated into three, and £90m will be spent on further automating an existing warehouse in Daventry.  

It is also expanding its local fulfilment network across the UK and said that these measures “will create a simpler, more modern network to significantly improve availability, reduce stock and enable faster customer deliveries. The new three-site general merchandise network will improve productivity and the working environment, as well as increasing resilience and flexibility for the future”.  

Building its wholesale business across territories  

Sainsbury’s is looking to build its wholesale business, with partnerships in place in Asia, the Middle East and Europe, as well as in the UK.  

From early 2020, as part of a strategic wholesale partnership with Australian food and drink retailer Coles, Sainsbury’s has been supplying a selection of its own-brand packaged groceries and household products to Australian retailer Coles – both in store and online – white labelled under the Coles brand.  

Green technologies  

Sainsbury’s hopes that its reputation as a leader in sustainability will help it win and retain ethically minded customers.  

In early 2020 it pledged investment of £1 billion on sustainability, to become a net zero business by 2040.  

From mid 2023, Sainsbury’s Nine Elms London superstore has been using fully electric delivery vans, ensuring grocery deliveries are made with zero emissions. 

Sainsbury’s is transitioning to operating totally electric fleets across all its stores by 2035. 

Furthermore, aiming for more than 750 ultra-rapid charging bays for electric vehicles (EVs) in more than 100 of its store car parks by the end of 2024. Early that year, the grocer launched an EV charging business called Smart Charge. The retailer Smart Charge users will shop in its stores while their vehicle charges. Those customers using the Smart Charge EV points will also be awarded Nectar points.

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